AMD turns up the Athlon heat

NEWS Advanced Micro Devices on Thursday outlined aggressive plans for new Athlon chips and predicted a break-even fourth quarter. In a surprise announcement, the company said it will begin shipping a 750MHz version of the flagship processor by the end of the year, according to Chairman and CEO W. J. Sanders. AMD had planned to deliver the 750MHz Athlon in the first quarter of next year. Instead, it will begin shipping 800MHz Athlon chips during that time. AMD has also begun demonstrating 900MHz Athlon chips, which require no special cooling technology, Sanders said. All three chips will utilise a new manufacturing process, which reduces the space between transistors inside them to 0.18 micron. Switching Athlon to the new process will help increase the chips' clock speed. The process advancement will also allow AMD at a later date to deliver Athlons with integrated Level 2 cache, leading to additional performance gains. Switching to 0.18-micron process, versus the 0.25-micron process, increases yields of processors and lowers cost of production for AMD. They would likely pass on those savings to customers. Executives also announced AMD expects to break even in the quarter. Wall Street had been forecasting a 36-cents-per-share loss, according to First Call/Thomson Financial. "Demand for our products is robust," Sanders said at the company's annual shareholders meeting. The company's projections for shipping five million processor units in the fourth quarter was "conservative," he added. "We remain confident that we can produce 1 million Athlons this quarter," he said. AMD revealed a bit of information about other upcoming products as well.The company is moving aggressively to thwart Intel's resurgence in the "value PC market" with a new 533MHz K6-2 processor that will ship this quarter. AMD will introduce the K6-2+ chip, a version of the K6-2 processor based on its 0.18 micron process, featuring integrated Level 2 cache, in the first quarter of 2000, said Robert R. Herb, senior vice president and chief marketing executive at AMD. "Intel's aggressive frequency push (earlier this year), and AMD's temporary lack of ability to deliver (competitive processors), relegated our product offerings to only the very low-end of the value PC market. As a result we saw a declining of K6-2 processor-based PCs throughout second and third quarters," he said. AMD's plan for K6-2+, however, is to match Intel Celeron chips, he added. While it improves performance of its AMD K6 family this quarter, AMD is looking to the second quarter of next year to begin diversifying the Athlon. "The AMD Athlon will provide frequency and performance improvements over a wide range of product segments (in the second half of 2000)," Herb said. Three new chips based on an "enhanced" Athlon core will be added to the product family starting in the second quarter. At the same time AMD will begin a move to a less expensive processor packaging, called Socket A. Athlon processors are now packaged in a cartridge, which fits into a slot, called Slot A, on a PC's motherboard. Moving to 0.18 micron, however, eliminates the need for the packaging, due to reduced heat and the ability to integrate memory on to the processor die. Less packaging translates into lower processor prices. One of the first new Athlons will be a chip code-named Thunderbird. Thunderbird will take aim at high-performance, hitting 1GHz and faster clock speeds. It will be available with either Slot A or Socket A packaging, Herb said. Another Athlon variant, code-named Spitfire, will be available only with Socket A packaging and will target the value PC market. This chip will likely be the replacement for AMD's K6 family of chips. The K6, however, will be around until the end of 2000, AMD officials have said. AMD did not disclose details on how the Athlon core will be enhanced or about the construction, such as pin count, of the Socket A. AMD, in the second half of 2000, will turn the key on Mustang, the code name for an even higher performing Athlon chip. Mustang will support a 266MHz system bus and up to 2MB of on-board cache. The chip also will be AMD's first 0.18-micron processor to utilise copper interconnects. The chip will work with Slot A or Socket A packages. Mustang, in Socket A packaging, will be the first Athlon with mobile features, according to AMD. This means that it will meet power consumption and thermal needs of notebooks. AMD, however, has not yet disclosed when it plans to introduce a mobile Athlon. Mustang will also have an application in the value market, Herb said. AMD will also introduce a two-way processing chip set in the second half of next year. The chip set, named IGD 4, will be one of the first multiprocessing chip sets. It will support Rambus memory as well as AGP 4X. AMD partners Hotrail and API are developing four-way processor chip sets as well. All of the multiprocessor efforts are targeted primarily at the server market. While AMD is working to improve the performance and availability of its processors, its ace in the hole in terms of profitability may be flash memory. The market for flash memory is exploding, driven by cellular phones, set top boxes and telecommunications equipment. AMD expects the market to grow to $4bn in 1999 and $7bn in 2002. AMD plans to add flash memory production capacity next year. It will also develop new flash memory, based on its 0.18-micron process, that will go into production in 2001. "Firm (Flash memory) pricing and the multiyear agreements we are entering into will provide AMD with a foundation for sustained and profitable growth," said Walid Maghribi, group vice president of AMD's Memory Group. Athlon chips using the 0.18 process are known as "K75" internally.